Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2]
[2014] WASC 444 (S)
•5 FEBRUARY 2015
SINO IRON PTY LTD -v- MINERALOGY PTY LTD [No 2] [2014] WASC 444 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2014] WASC 444 (S) | |
| Case No: | CIV:2164/2013 | ON THE PAPERS | |
| Coram: | EDELMAN J | 5/02/15 | |
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Form of declaration determined | ||
| B | |||
| PDF Version |
| Parties: | SINO IRON PTY LTD KOREAN STEEL PTY LTD MINERALOGY PTY LTD |
Catchwords: | Declarations Form of declaration to be made Issues arising beyond the scope of matters litigated at trial Extent to which declaration should extend to obligations to third parties |
Legislation: | Supreme Court Act 1935(WA), s 25(6) |
Case References: | Bass v Permanent Trustee Co Ltd [1999] HCA 9; (1999) 198 CLR 334 Gouriet v Union of Post Office Workers [1977] UKHL 5; [1978] AC 435 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- First Plaintiff
KOREAN STEEL PTY LTD
Second Plaintiff
AND
MINERALOGY PTY LTD
Defendant
Catchwords:
Declarations - Form of declaration to be made - Issues arising beyond the scope of matters litigated at trial - Extent to which declaration should extend to obligations to third parties
Legislation:
Supreme Court Act 1935(WA), s 25(6)
Result:
Form of declaration determined
Category: B
Representation:
Counsel:
First Plaintiff : No appearance (on the papers)
Second Plaintiff : No appearance (on the papers)
Defendant : No appearance (on the papers)
Solicitors:
First Plaintiff : Allens
Second Plaintiff : Allens
Defendant : Michael John Dunham
Cases referred to in judgment:
Bass v Permanent Trustee Co Ltd [1999] HCA 9; (1999) 198 CLR 334
Gouriet v Union of Post Office Workers [1977] UKHL 5; [1978] AC 435
- EDELMAN J:
The issues concerning the form of the declaration
1 The trial in this matter was heard and decided in November 2014. In my reasons for decision I explained that cl 20.1(a) of the Fortescue Coordination Deed imposes an obligation upon Mineralogy to take steps to transfer to Sino Iron and Korean Steel the status of proponent under Ministerial Statements 635 (as amended) and 822. That clause provides:
Mineralogy acknowledges that it will transfer to Sino Iron and Korean the Environmental Approval in accordance with the Sino Iron Takeover Agreement and the Korean Takeover Agreement, respectively, as those benefits may apply to the Project.
2 Clause 3-2 of Ministerial Statement 635 (as amended) provides as follows:
If the proponent wishes to relinquish the nomination, the proponent shall apply for the transfer of proponent and provide a letter with a copy of this statement endorsed by the proposed replacement proponent that the proposal will be carried out in accordance with this statement. Contact details and appropriate documentation on the capability of the proposed replacement proponent to carry out the proposal shall also be provided.
3 At trial, the only substantive relief that was sought by the plaintiffs, the Citic parties, was a declaration. The form of the declaration sought at trial was as follows:
A declaration that pursuant to clause 20.1 of the Fortescue Coordination Deed, clause 4A and schedule 8 clause 13.1 of the Korean Steel Takeover Deed and clause 7.3(g) of the Sino Iron Takeover Deed, Mineralogy is required to transfer the EPA Approval to Sino Iron and Korean Steel in accordance with condition 3-2 of the Ministerial Statements as outlined at [9] above by:
(i) signing a letter substantially in the form of that provided by CPM with its letter dated 23 November 2012 and lodging it with the Office of the Environmental Protection Authority; and
(ii) lodging with the Office of the Environmental Protection Authority documents substantially in the form of those provided by CPM with its letter dated 23 November 2012.
4 In my reasons for decision I indicated some concerns with the form of the proposed declaration by the Citic parties. The parties were given the opportunity to make submissions about the appropriate form of any declaration. The submissions were made in writing. The final submission was made yesterday.
5 There are several matters of common ground concerning the form of a declaration that should be made in light of my reasons:
(i) the declaration should only be concerned with an application for the transfer of the status as proponent;
(ii) the declaration should concern the status as proponent under both Ministerial Statement 635 and Ministerial Statement 822 (which operates as both an amendment to Ministerial Statement 635 and as a Ministerial Statement);
(iii) the declaration can refer to cl 20.1(a) of the Fortescue Coordination Deed; and
(iv) the application should be made to the Minister for the Environment.
6 There are two essential issues in dispute concerning the form of the declaration. The first is the person to whom a transfer should be directed in the application for transfer. The second is whether the declaration should provide specific details about the documents to be lodged with the Office of Environmental Protection as part of the application for the transfer of the status of proponent and the timing for lodgement.
7 Both of these issues should be answered broadly in the manner that Mineralogy has proposed. The declaration should be that the application for transfer should be for a transfer of the status of proponent to Sino Iron and Korean Steel. And the declaration should not prescribe the nature and form of the documents to be contained with the application.
Issue 1: The person to whom the transfer should be directed
8 In my reasons for decision I concluded that cl 20.1(a) of the Fortescue Coordination Deed imposes an obligation upon Mineralogy to take steps to transfer to Sino Iron and Korean Steel the status of proponent under Ministerial Statement 635 (as amended).
9 The Citic parties submit that the 'most logical and practical way to achieve a transfer to those entities' is for the transfer to be effected to CPMM as the agent of Sino Iron and Korean Steel. As I explained in my reasons at [52], in February 2007 CPMM was appointed by Sino Iron and Korean Steel to manage the day to day operations of the Sino Iron Project.
10 Mineralogy disputes this proposed order. Mineralogy correctly points to the absence of any contractual obligation, and the absence of any determination in my reasons, that requires it to apply for the transfer of the status of proponent to a nominee or an agent of Sino Iron and Korean Steel. Mineralogy says that the application should be for a transfer to Sino Iron and Korean Steel jointly, and that there is 'no legal (nor any known practical) impediment to the plaintiffs becoming the joint proponents'.
11 It is possible that the order sought by Mineralogy will simply create an additional bureaucratic hurdle. If the Minister transfers the status of proponent to Sino Iron and Korean Steel, then they may then consider it 'logical' or 'practical' to apply for the transfer of the status of proponent to their agent, CPMM. But this result cannot be avoided for three reasons.
12 First,the relief sought at trial did not seek a transfer of the status of proponent to CPMM. Nor was any submission made at trial to this effect. Had this relief been sought, or the submission made, it is possible that evidence might have been led in response from Mineralogy. At the very least, I would have required submissions about the nature of the relief potentially beyond the strict contractual entitlement before exercising my discretion to make such an order. In contrast, the liberty that I gave the parties to make submissions on the form of declaration was concerned only with the appropriate form of declaration in light of my reasons for decision.
13 Secondly,there is, at least, a strong argument that Mineralogy is not obliged by cl 20.1(a) to apply for a transfer to any other party than Sino Iron or Korean Steel. If such an implication were to be sought then further questions could arise. Would the application for transfer be required to be directed to a transfer to any party that Mineralogy is directed by the Citic parties? What would be the extent of the agency of such a potential transferee before Mineralogy would be required to make the transfer? How should Mineralogy be satisfied about the existence of that agency relationship?
14 In submissions in reply, the Citic parties say that 'it is not contended that Mineralogy has an obligation to transfer to CPMM, but rather that a transfer to CPMM (as agent of Sino Iron and Korean Steel) would be a practical and simple way to effect the transfer to both the plaintiffs'. But a further problem arises if Mineralogy is not obliged by cl 20.1(a) to apply for a transfer to CPMM. In circumstances in which Mineralogy does not consent to apply for a transfer to CPMM, then what basis is there for the Court to declare that Mineralogy is obliged to do so? The method chosen by the Citic parties might be a practical and simple approach but there was no argument at trial concerning why, if more than one mechanism is available to effect the transfer, Mineralogy cannot choose that mechanism which it prefers.
15 Thirdly, if the declaration is to extend to determine the rights of CPMM as a potential recipient of a transfer then it is, at least, arguable that CPMM should have been a party to the litigation.
16 The appropriate form of the declaration is that the application for transfer should be concerned with a transfer to Sino Iron and Korean Steel.
Issue 2: Whether the declaration should prescribe the documents to be contained with the application and the timing
17 The Citic parties seek a second part of the declaration as follows:
By 2 February 2015, Mineralogy must sign and lodge with the Office of the Environmental Protection Authority the documents annexed and marked 'A', being an application to the Minister for a transfer of the status of proponent of Ministerial Statement 635 (as amended) and Ministerial Statement 822 from Mineralogy to CITIC Pacific Mining Management Pty Ltd [CPMM] (as agent for Sino Iron and Korean Steel).
18 The proposed Annexure A is hundreds of pages long and contains a number of documents. The Citic parties say that this declaration is appropriate because the documents proposed are simply an updated version of those documents that were contained in the November 2012 letter (as set out in the form of declaration initially sought by the Citic parties).
19 It is appropriate to exclude the opening words which provide for a date by which the obligation must be performed. The immediate difficulty with this proposed part of the declaration is that it converts a declaration (which was sought at trial) into a mandatory injunction (which was not). Another difficulty is that no submissions were made concerning the timing of any obligation. Such submissions would need to have considered an implication of an obligation to perform cl 20.1(a) within a reasonable time, and evidence may have been necessary concerning what time was reasonable.
20 To deal with this, the Citic parties submitted, in the alternative, that the order could be expressed as a declaration, with the omission of a date, saying that 'Mineralogy must sign and lodge ...'. The Citic parties say that there are important reasons why the declaration should include the detail about the manner in which Mineralogy must apply for the transfer of the status of proponent, and the content of that application. These reasons include the importance of the project and the prospect that the Citic parties may be implementing environmental proposals without the benefit of certain statutory defences. By referring to the precise documents to be lodged Citic seeks to avoid the possibility of later dispute.
21 The desire expressed by Citic, or indeed any litigant, to have a declaration expressed in terms which avoid the potential for further dispute is understandable. Such a course is desirable. But, other than to provide the parties with liberty to apply in relation to future disputes concerning the implementation of the declaration, I do not accept that this part of the declaration that the Citic parties seek is appropriate. This is for three reasons.
22 First,no argument was directed at trial by either party about the form by which any application for transfer should be made or the nature or content of the documents that were proposed to be included and annexed to the declaration. The obvious reason for this may have been that the form of any application and the nature and content of the documents required could be affected by my conclusions as to the nature of the underlying rights. The parties are even in dispute about the terms of the documents to be provided. Mineralogy provided a substantially differently worded letter to the Office of Environmental Protection. Although, in submissions in reply, the Citic parties said that they do not have any substantive objections to Mineralogy's proposed letter save for the issue concerning CPMM as agent (issue 1 above) the different terms of even the letter to be sent illustrates the difficulty in adjudicating this issue without reopening the trial.
23 Secondly,the foundation for the power to make a declaration is s 25(6) of the Supreme Court Act 1935 (WA). That section is based on s 50 of the Chancery Procedure Acts of 1850 and 1852, 13 16 Vict c35, c86 which focuses upon the quelling of controversies between persons concerning legal rights: claim rights, powers, privileges and immunities.1 As six justices in the High Court said in Bass v Permanent Trustee Co Ltd2
A judgment of a court is an affirmation, by the authorized societal agent of the state ... of the legal consequences attending a proved or admitted state of facts. It is a conclusive adjudication that a legal relation does or does not exist. The power to render judgments ... is the power to adjudicate upon contested or adverse legal rights or claims, to interpret the law, and to declare what the law is or has been. It is the final determination of the rights of the parties in an action which distinguishes the judgment from all other public procedural devices to give effect to legal rights.
24 It is unclear the extent to which there is any substantive controversy about the nature or content of the documents that were proposed to be included and annexed to the declaration, or the practical or legal significance of any controversy. To the extent to which controversy exists, cl 3-2 of Ministerial Statement 635 (as amended) does not prescribe the manner in which the application for a transfer is to be made save that it requires (i) a letter with a copy of the Ministerial Statement 635 endorsed by the proposed replacement proponent that the proposal will be carried out in accordance with this statement, and (ii) contact details and appropriate documentation on the capability of the proposed replacement proponent to carry out the proposal.
25 These circumstances militate against the exercise of discretion to make this part of the declaration.
26 Thirdly,the Citic parties' documents which are attached as annexure A to the proposed declaration are premised upon the assumption that the transfer be to CPMM. They provide contact details and a capability statement concerning CPMM not Sino Iron and Korean Steel. For the reasons expressed in relation to issue 1 above, that is not consistent with my reasons for decision.
Conclusion
27 A declaration should be made, substantially in the terms proposed by Mineralogy to give effect to my reasons:
It is declared that, by reference to cl 20.1(a) of the Fortescue Coordination Deed dated 22 October 2008 between the plaintiffs, the defendant and Citic Pacific Ltd, the defendant is obliged to make an application to the Minister for the Environment for the transfer to the plaintiffs of the status of proponent under Ministerial Statement 635 (as amended) and Ministerial Statement 822.
28 I have omitted from this declaration a reference to the obligation of Mineralogy (which appears to be common ground) in clause 3-2 of Ministerial Statement 635. That obligation is to provide to the Minister for the Environment a letter with a copy of the Ministerial Statement 635 (as amended) and Ministerial Statement 822 endorsed by the plaintiffs that the proposal will be carried out in accordance with the Statements, and contact details and appropriate documentation on the capability of the plaintiffs to carry out the proposal.
29 The reason why this substantive obligation has not been included in the declaration is because (i) it does not appear to be in dispute and (ii) the Citic parties contend that the statement of that obligation may lead to confusion. In reply submissions the Citic parties referred to a part of Mineralogy's proposed declaration which, in effect, contained this obligation. The proposed declaration is that 'the defendant is obliged to make an application, pursuant to condition 3-2 of Ministerial Statement 635 published under section 45(5) of the Environmental Protection Act 1986 (WA)'. The Citic parties said that these words would not quell a controversy but may 'give a false impression that clause 20.1(a) only requires Mineralogy to make an application pursuant to condition 3-2 of the Ministerial Statement'. It is correct that no determination was made by the Court that the application was so limited. No submissions were made on this point at trial. And in the absence of any controversy on this issue, I would not exercise my discretion to extend the declaration to these matters.
1Gouriet v Union of Post Office Workers [1977] UKHL 5; [1978] AC 435, 501 (Lord Diplock).
2Bass v Permanent Trustee Co Ltd [1999] HCA 9; (1999) 198 CLR 334, 355 [46] (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne & Callinan JJ) quoting Professor Borchard.
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